Unemployment

claimant count

• This is a measure of those claiming benefits.

• Those eligible for the Job Seeker’s allowance

unemployed

To be eligible for Job Seekers’ Allowance you need to be:

International Labour Organisation’s Labour Force Survey(ILO/LFS)

• This is a survey and measures those who have been looking for work and have been available in the past 4 week and are available to start work in the next 2 weeks

• This is now the official measure of unemployment in the UK

easy to access, provides indication of changing levels of unemployment

two advantages of calculating unemployment by the use of the Claimant Count

largest sample size of any household survey

advantage of ILO/LFS measure of unemployment

provides no guarantee of adequate coverage of any industry

disadvantage of ILO/LFS measure of unemployment rate

not all unemployed claim benefits, i.e. in 2008 where LFS is at around 2500 and JSA is at around 1500

Why is the ILO/LFS level of unemployment higher than the JSA level of unemployment?

unemployment

A situation where someone of working age is not able to get a job but would like to be in full employment

employment

where a person is willing to work at the going wage rate and is able to get a job

under-employment

people have a job, but it is part time or temporary. They would like to work full time but only have a part time income.

voluntary unemployment

a situation where the unemployed choose not to accept a job at the going wage rate

involuntary unemployment

a situation where workers are willing to work at the market wage or just below but are prevented by factors beyond their control

the most skilled since they are more picky about employment and are more likely to wait for the right positions

Who is the most likely to be voluntarily unemployed?

more efficient use of past training and education, but necessary jobs remain unfilled

Is voluntary unemployment inefficient?

voluntary and involuntary unemployment is a construct

What did Robert Lucas(Nobel prize winning economist) argue?

generous unemployment benefits, high marginal tax rates, hoping to find job more suited to skills/qualifications, some jobs seen as ‘demeaning’ or too tedious

Reasons for voluntary unemployment

make accepting a job less attractive

Impact of generous unemployment benefits

reduces effective take home pay

Impact of high marginal tax rates

fruit picking, security gaurd

Some jobs are seen as ‘demeaning’ or too tedious